Investing and Hiring In the Cannabis Industry

Investing in the Cannabis/Hemp/CBD arena has been a challenge for most investors in that the biochemical products, processes, regulatory issues continue to change on a daily if not hourly basis in a state by state and federal compliance arena.

Having been speaking with individual Family Offices, Venture Capital Groups and Fund of Funds I have discovered a common theme for their criteria for investment. 

First they need a “buttoned up” corporate environment where there are players who have functioned in highly regulated industries in the past such as alcohol, tobacco, gaming and pharmaceuticals due to the rigorous guidelines imposed on the industry. 

This coincides with the Federal Government looking at turning all of these matters over to the TTB at Federal levels and the Alcohol beverage commissions at state levels. Some have already done so. The systems in place require all levels of entities involved have permits and pay taxes. A winery, brewery or distillery needs the Federal Basic permits. If they use a third party bottler they need permits, distributors need permits, if it is transported another permit is needed and finally another permit is needed at retail.

Most states involved in legalizing Cannabis/Hemp Products follow the same rules. The grower needs a permit, the extractor needs a permit, the manufacturer needs a permit and if it is transported at any level the transporter needs a permit. It finally resides at the Dispensary and whether that is a medical or recreational outlet it is strictly regulated and permitted. To most people in the business world this is cumbersome and daunting. To people who worked in the Alcohol industry it is what they have already done. Not a problem. 

If you are looking to jump on board in this promising industry find someone who has experience in highly regulated environments. It will make your life easier and will make it more likely that you will be successful. It will also prevent you from doing something that can result in fines or the loss of your business.